Evolution of ERP Systems in the Cloud: A Study on System Updates
- What are the organizational and contextual factors affected by the forced updates within the evolution phase of cloud-based ERP systems?
- How the cloud-ERP system is updated? And how frequent?
- Users’ thoughts and attitudes about the update process;
- Acceptance and readiness for the update process;
- User training activities after system updates;
- And finally, the benefits and challenges of forced updates within organizations.
2. Related Literature and Theoretical Background
2.1. Cloud ERP Systems
2.2. The ERP Lifecycle Framework
- Product: product is about the hardware and software changes that are implemented during updates. There are no proper guidelines or standards for ERP maintenance and update preparations . Even if there is not much literature regarding how a cloud-based ERP system is updated , however, the topic has been briefly discussed by few researchers. For example, Juell-Skielse and Enquist  state that the cloud ERP vendors upgrade their software regularly. There is no literature at this time on the ideal frequency of updates for an ERP system, as the areas of cloud ERP maintenance and upgrades are understudied as compared to other ERP implementation phases [3,8]. However, Calvert and Seddon  have conducted research on the consequence of updates in an on-premise context, and they suggest that updates typically cause a decline in both individual and organizational capacity for a certain period afterwards. In addition, organizations will need to undertake extensive user re-training efforts to correspond with the system upgrade . This matches the findings of another study, which argues that client organizations will most likely experience ripple effects after updates . However, if the vendor has thoroughly conducted tests prior to an update, the client organizations would largely be shielded from these negative effects . An overview of the issues discussed in literature in relation to updating cloud-based ERP system is provided below:
- It is easier to introduce a new functionality ;
- It is the vendor who provides a helpdesk and maintenance support ;
- The organizations are not the owners of the system, as they do not own the infrastructure or run the applications ;
- Cloud-based ERP vendors regularly release new versions ;
- Cloud-based ERP systems usually get more frequent updates and new functionalities than on-premise ERP systems .
- People: This dimension refers to the users of the system, and their way of developing skills within it, also called ERP training. If a user has good skills and much knowledge regarding the system, it makes it possible for the user to become more effective and competitive, and a decrease in costs will occur. In order to continually be able to be more efficient, the ERP system needs to be updated with smarter functionality. In this case, the users of the system, the people, need to learn how to use the new functionalities to take advantage of them, and therefore ERP training could become relevant. Training is outlined as what enhances and facilitates the user’s capability to use the ERP application . The importance of ongoing (or continuous training) after the ERP system has been implemented, has not been widely addressed in the academic arena [7,20]. Hence, there is also very little research to assess the implications of continuous ERP upgrades with regard to ERP training needs . However, the importance of training before and during the implementation phase has been well documented in earlier research [7,20,21]. ERP training is an important and relevant topic in literature, as it is one of the most important critical success factors (CSF) identified in ERP implementations [4,6,15,21]. Therefore, organizations have to prioritize training to be able to enhance the skills of their employees, and to make it easier for users to change roles within the organization . If the users of the system spend time on training, they can more easily understand the importance of continuous training and improvement. As their environment is constantly changing, this could motivate them to continue training, and being more active and cooperative in collaboration with other departments . To improve, or at least maintain, the users’ expertise and capability of using the system, user training is necessary during the evolution phase [6,7,20]. Well-trained users, can take better advantage of the capabilities of the system and motivate and initiate new users . One of the challenges with ERP training is that it is typically under-budgeted, and training is often the first thing to be cut in the budget, especially during economic downturns or increasing competition [7,15]. Another challenge is that users do not see the need for changing their work processes and usually resist this change . According to Wheatley ,companies spend from 50 percent to as little as 5 percent of their ERP budget on training. He also states that organizations have begun to realize the fact that training should be a key requirement . While discussing how ERP training should be done most effectively, it is important to keep in mind that the users should not only train in how to use the systems’ functionality, but they also might need to relearn their jobs, which could be an even more challenging task, and is a relevant problem for discussion in the change management dimension .
- Process: This dimension is about how the users need to re-engineer their processes to be able to adapt to the new business models and functionalities . This is a huge task when first implementing a new system, but within a cloud-based ERP environment, the incremental changes implemented in updates are typically small and do not introduce major changes to the existing processes. In addition, as cloud-ERP mainly targets SMEs, customizations are (in most cases) very rare in the cloud ERP domain , and vanilla implementations are commonly adopted.
- Change management: Change management is described as the process of administering and coordinating changes introduced to business processes and applications . Change management also seeks to warrant the acceptance and readiness of the new system, in order to allow the organization to foster the benefits of its use . Hence, change management is considered one of the most important success factors in ERP implementations . This study will look into change management and process from a cloud-based ERP system perspective and will look at how users accept new functionalities that have been implemented during updates and if the users need to change their work practices after updates. According to Foster et al. , 75% of organizational change management efforts involving technology fail as a result of people’s negative reactions to making change in their work practices. According to Seethamraju , the organization using a cloud-based ERP system should be aware that there is no guarantee that the users will accept changes, and use the new functionality effectively. The handling of change management issues is often viewed as more difficult to handle, than technical issues . In Seethamraju’s  study, it was reported that educating users and training them on how to use both the existing and newly introduced functionalities, and then make them actually use them, were identified as critical challenges in the post-implementation phase.
3. Research Methodology and Cases
3.1. Target Cases
3.2. Sampling and Data Collection
3.2.1. Interview Guide
3.2.2. Data and Cross-Case Analysis
4.1. The Process of Implementing Updates
4.1.1. Date and Time of Updates
4.1.2. Frequency of Updates
4.1.3. Users’ Influence on New Functionalities during Updates
4.2. User Training
4.2.1. Need for User Training
4.2.2. Prioritization of Training
4.2.3. Advantage of Training
4.2.4. Training Completed by Users
4.3. Change Management and Process
4.3.1. Need for Updating the System
4.3.2. Change of Work Practices/Processes
4.4. Cloud-Based ERP System Update Advantages
4.5. Cloud-Based ERP System Update Challenges
4.5.1. Users’ Control over Updates
4.5.2. Functionalities That Were Promised but Not Implemented
4.5.3. Functionality Does Not Work after Updates
4.5.4. The System Is Slow after Updates
5.1. The System Updating Process
5.1.1. The Date of Updates
5.1.2. Number of Updates per Year
5.1.3. The Opportunity to Have an Influence
5.1.4. Users Relationship towards Updates
5.1.5. User Training
5.1.6. Change Management
5.1.7. System Testing
5.1.8. Summary of Challenges and Potential Solutions
- The date of updates is sometimes challenging for accountants using the system. A possible solution is for Xledger to talk to accountants, get informed about their deadlines, and update the system at a time that not interfere with them.
- The size of the updates is according to half of the users challenging to maintain their effective way of working. A possible solution is to introduce fewer new functionalities in each update.
- Lack of information about what is going to be implemented in the next update makes it hard for users to both be prepared, and to have an influence. It is difficult to provide a possible solution for this problem, as it is a challenge for Xledger to provide this information, as they might promise a functionality that they will fail to deliver.
- Release notes are written too technical for the users to understand, so the users do not always understand the meaning of the new functionality as it is not put in a context when presented. Xledger provides an untailored release note, while the users request a tailored version for them to better understand it. A possible solution could be to tailor the release notes to the different roles of the users, or divide it by the modules, put the new functionality in a context and hand over the job of writing the release note to someone with a non-technical background.
- Some functionalities do not work after updates. A possible solution could be to dedicate more resources for user testing by, for example, inviting super users or partners to test the system prior to updates.
5.2. Users Are Not in Charge of Updates
- Less planning and testing;
- Lower costs;
- All users always have the same version of the system;
- Users get to focus on their core competence;
- Updates are regular;
- The system is always updated;
- The changes that the users need to handle after each update is smaller;
- Sharing knowledge about the system is easier.
- Lack of information about the future plan of updates;
- The users do not and can’t decide when the system is updated.
5.3. The Evolution Phase
6. Study Limitations
6.2. Validity and Transferability
6.3. The Topic
7. Conclusions and Future Research Avenues
Conflicts of Interest
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|Respondent||Company (Size)||Industry Type||Modules Implemented||Go-Live Year||Years Respondent Has Used the System||Interview Duration|
|System consultant||Thor (Large)||Accountancy||All except purchasing||2004||5+||42 min|
|Accountant||Thor (Large)||Accountancy||All except purchasing||2004||5+||32 min|
|Financial consultant||Thor (Large)||Accountancy||All except purchasing||2004||1+||25 min|
|System consultant||Odin (Large)||Accountancy||CRM, Accounting and Project||2012||8+||43 min|
|IT director||Balder (Small)||Event planner||All except CRM||2015||1+||36 min|
|IT manager||Orm (Large)||Accountancy||All except CRM||2014||5+||30 min|
|Chief Executive Officer (CEO)||Loke (Large)||Accountancy||All||2007||10+||36 min|
|Senior consultant||Loke (Large)||Accountancy||All||2007||10+||38 min|
|Business manager||Loke (Large)||Accountancy||All||2007||10+||32 min|
|System consultant||Idun (Medium)||Accountancy||All||2008||5+||33 min|
|Consultant manager||Narve (Medium)||Shipping||All except purchasing||2012||1+||43 min|
|Deputy director||Heimdall (Medium)||Accountancy||Accounting, Invoicing, Project, and Personnel/Expenses||2016||1+||30 min|
|Chief Financial Officer (CFO) and Accounting manager||Frøya (Medium)||Kindergarten||All except purchasing||2011||5+||42 min|
|Chief Financial Officer (CFO)||Sleipner (Small)||Real Estate and Facility Management||All except CRM and purchasing||2016||1+||38 min|
|Consultant 1||Xledger||Cloud-ERP Vendor||-||2003||1+||31 min|
|Consultant 2||Xledger||Vendor||-||2003||1+||25 min|
|Consultant 3||Xledger||Vendor||-||2003||1+||40 min|
|The Process of Implementing Updates||User Training Issues||Change Management Issues||Cloud-Based ERP Updates Advantages||Cloud-Based ERP Updates Challenges|
|The system is updated on a Sunday, which fits most informants.|
The date the system is updated could crash with important deadlines.
5/15 think the frequency is too often.
|There is a need for users training and to stay updated.|
Users plan their day around an update, or else they work overtime.
Users do not prioritize training.
If you spend time on training, you gain an advantage.
Few users train, test new functionalities, read the release notes and participate in webinar as training.
|Users usually think that updates are improvements.|
Users think it is okay to change their work processes, but it is a bit frustrating and could affect their motivation in a short time.
Some think that they have an opportunity to have an influence and feel heard during the update process, and some do not.
|All users always have the same version of the system.|
Users get to focus on their core competences.
Users do not need to think about updates.
Knowledge is transferrable independent of organization.
More possibilities for a good price.
Users do not need to make big changes after updates like with on-premise ERP systems.
|The release notes are challenging to read.|
The users do not have control over what functionality is coming.
There is a lack of information before updates.
The new functionality implemented is not placed in a context. What is promised is not implemented.
Some functionalities do not work after updates.
The system is usually slow after updates.
|The date of updates|
|The dates of the quarterly system updates follow the seasons.||The date the system is updated can crash with important deadlines for accountants.|
|The number of updates per year|
|The system is updated four times a year because it fits the developers and it works well.||10/15 of the users think that four times a year is good. The rest of the users think that too much functionalities are implemented in each update.|
|The opportunity to have an influence|
|Important existing, and new customers are a part of the group who influences what are implemented in an update.|
Users are supposed to go through support if they have a suggestion or an issue, but some directly talk to employees instead, which is a routine violation.
|Users have split opinions regarding their opportunity to have an influence.|
Some users do not feel heard through support, so they communicate with Xledger employees directly when they have issues.
|Users’ relationship with updates|
|Users have a non-existing relationship to updates and do not pay attention towards them.||Users clear their schedule before an update, and those who do not, are usually prepared to work overtime. Users do not know what is coming in an update, so it is hard for them to prepare.|
|Few of the users read the release notes.||13/15 had different issues with the release notes.|
|Users do not participate in webinars.||7/15 users participate in the webinars. The webinars are not about what is coming for the users to prepare, it is about what has already been done.|
|Users think that the time they spend on training and understanding new functionality are longer than the time they would save.||14/15 users think that spending time on training should gain them an advantage.|
|We test the system in three test cycles that last for two weeks before the update.||A challenge is that Xledger do not spend enough time on testing.|
|Users are resistant to change and are not interested in learning new ways of conducting their work.||Users need to change their work processes due to updates, and most think it is okay.|
|Flow of information|
|Our main focus is not on external communications, as we do not want to promise something that is not implemented.||Xledger announces new functionalities that are not there before the next update, or not at all. Users are uncertain regarding what will be implemented in the future, which they find challenging.|
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Bjelland, E.; Haddara, M. Evolution of ERP Systems in the Cloud: A Study on System Updates. Systems 2018, 6, 22. https://doi.org/10.3390/systems6020022
Bjelland E, Haddara M. Evolution of ERP Systems in the Cloud: A Study on System Updates. Systems. 2018; 6(2):22. https://doi.org/10.3390/systems6020022Chicago/Turabian Style
Bjelland, Elise, and Moutaz Haddara. 2018. "Evolution of ERP Systems in the Cloud: A Study on System Updates" Systems 6, no. 2: 22. https://doi.org/10.3390/systems6020022